Obama Calls For New Revenue & New Spending Cuts. Simpson-Bowles Time?

Just before the Superbowl, Obama had a CBS interview. During that discussion, Obama claimed that “There is no doubt we need additional revenue, coupled with smart spending reductions in order to bring down our deficit,” he said. “I don’t think the issue right now is raising rates.”

Sounds great. So, perhaps the Republicans need to revive the bipartisan Simpson-Bowles package as their Republican bargaining strategy over the next few months since it contains the very things Obama is calling for.

During earlier considerations Simpson-Bowles, the main stumbling block for Republicans was the tax increase for highest income earners. This sticking point, however, was settled during the Fiscal Cliff deal when the tax margin was raised for the $400K/$450K threshold.

Meanwhile, while the Democrats claim to despise the spending cuts in Simpson-Bowles, it could be/should be argued (as it was previously debated in 2010 and 2011) that such cuts are the necessary counterpart to the tax increases which the Republicans have now yielded to –a true “balanced approach” (the Democrat’s favorite buzz word).

The virtues of Simpson-Bowles are that it includes entitlement reform, actually reins in spending, simplifies the tax code, and most importantly, is a bipartisan commission that originated from President Obama. And because Simpson-Bowles originally had more Democrat support than Republican support, it would put the Democrats in a tough spot if they rejected it once again — especially since Obama made the remarks he did earlier this evening.

Coming off the miserable Fiscal Cliff deal and treading water in the debt ceiling and sequestration debates to come, offering the Simpson-Bowles package may be just what the Republicans need as a rallying point for true reform. The economy is contracting. The Simpson-Bowles package is already written. We all know what is in it. Republicans — just do it!

Crossposted at alanjoelny.com